One pertinent issue briefly discussed in the recent webinar I attended was that of the effect of the March 2020 Calmusky decision upon estate planning.

In Calmusky v. Calmusky, the Court decided that assets held in a Registered Income Fund (RIF) were presumed to constitute a resulting trust, instead of a direct transfer to the named beneficiary of the RIF. The anticipated impact of this decision on estate planning and administration – and, by proxy, litigation – has caused quite a stir in the legal community.

In the “Wills and Estates Refresher” webinar, the presenters expressed frustration with Calmusky and the complications of its application to their own estate planning practices. After all, designating a beneficiary of a RIF or similar investment account is an excellent tool an estate planner can use to transfer assets outside of a testator’s estate, thus reducing estate administration tax for a given estate. Imposing a resulting trust upon the assets in these accounts to the benefit of the estate quite explicitly defeats the purpose of using such an estate planning mechanism.

The presenters suggested that the estate planning bar was not overly enthusiastic about following Calmusky, for the reasons stated above. In the very recent 2021 decisions of Munro v. Thomas (May) and Mak (Estate) v. Mak (June), the Court was confronted with beneficiary designation fact scenarios quite similar to Calmusky, and decided quite differently. Mak Estate, in particular, directly addressed the legal reasoning in Calmusky and came to the opposite conclusion regarding the question of whether the assets ostensibly transferred to a designated beneficiary ought to be presumed to be held in resulting trust for the benefit of a deceased’s estate. This should be promising to estate planners nervous about the implications of Calmusky over the past year.

However, as Calmusky, Munro, and Mak Estate were all determined at the level of the Ontario Superior Court, until we hear otherwise from the Court of Appeal or Ontario Legislature, the practical impact of Calmusky is in a state of legal limbo.

Thank you for reading!

Fred Tonelli